Located on Willoughby Avenue, Fireweed Place apartments are for people 55 and older. Built in 1995, the building never has reached full occupancy and is struggling to pay off a loan from the Alaska Housing Finance Corp., said Tom Dahl, president of Senior Citizen Support Services, the nonprofit group that runs the building.

The organization is asking the city for a $100,000 incentive grant, contingent on state support, to provide 15 months of breathing room as it looks for a long-term solution, Dahl told Assembly members on Wednesday.

"This is not a request for tax exemption," he said. "Our situation is so grave we want to approach it from a different point."

Fireweed Place estimates it will not be able to make its mortgage payment to AHFC after June 1. AHFC has declined a request for loan forgiveness and has asked Fireweed Place for a deed in lieu of foreclosure, Dahl said.

If AHFC takes over, Fireweed Place officials worry the building will not remain as senior housing, management will move to Anchorage and the state won't pay property taxes, he said.

Sherrie Simmonds, corporate communications officer for AHFC, said Fireweed Place is current on its loan and Alaska Housing has not made any attempts to foreclose. AHFC can't answer whether it would foreclose on the property in June, she said.

"We've been working really closely with them," she said. "We hope they'll be able to work out the attempts ... to make it viable. The last thing we want to do is take the property back."

Alaska Housing isn't sure if Fireweed Place would stay as senior-only housing if the state corporation did take over, but would do as much as possible to keep it that way, Simmonds said. AHFC properties around the state have on-site management, she said.

"We've been meeting with the Fireweed Place management and residents to assure that they wouldn't see anything different in terms of the management of the property," she said. "No one that's there now would be evicted."

Fireweed Place's loan balance with the AHFC is $4.2 million. It can't continue to make payments on $3 million of the debt on what it receives in rent, Dahl said. Monthly expenses have exceeded revenues by about $26,000 and the organization's reserves are depleted, he said.

"When the loan was originally granted, AHFC realized the start-up costs and provided funds to meet the shortfalls," he said. "Those reserves are gone."

To hold off foreclosure, Fireweed Place hopes to establish a partnership with the city, the AHFC and the state Legislature, Dahl said. Juneau Rep. Bill Hudson has put in a funding request to the House Finance Committee, but city support would help, Dahl said.

"What we really can't handle is the monthly payments," he said. "If we can have a break ... we can be a project that makes some sense."

More time will allow Fireweed Place to explore grant possibilities and raise funds privately, Dahl said.

Finance Committee Chairman Jim Powell said Assembly members will give Fireweed Place an answer on the request by next week. Assembly member Dale Anderson cautioned that the city is trying to maintain a "straight-line" budget.

"If we give $100,000 to you, where do we cut? That's the decision we will be left to make," he said.

The Assembly last year turned down a "community purpose" tax exemption for Fireweed Place, but reduced the assessed property value, which in turn reduced the building's property taxes, Dahl said. When the loan initially was approved, the state and Fireweed Place didn't expect to pay property taxes, Dahl said.

Assembly member Jeannie Johnson said Fireweed Place was a new endeavor for the AHFC when it was built and the rules were just being written.

"I see this as Fireweed Place being a victim of a build-as-you-go situation," she said.

Occupancy has been another issue. The average occupancy at the 67-unit Fireweed Place has been about 74 percent, well below an anticipated 95 percent. Today, the occupancy is 88 percent because eight units are rented to legislators and legislative staff. Dahl said he didn't anticipate the occupancy rate would grow much more.